Introduction to Exchange Traded Funds (ETFs) - JSE
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Introduction to Exchange Traded Funds (ETFs) Whether you’re a first-time investor or an experienced professional managing risk, ETFs provide an easy, cost effective investment option giving you access to a broad range of investments rolled into one. www.jse.co.za Johannesburg Stock Exchange
What is an ETF?
An ETF is a JSE-listed
i nv e st m e n t p ro d u c t
that tracks the
performance
of a particular ‘basket’
of shares, bonds, money
market instruments or a
s i n g l e c o m m o d i t y, l i ke
gold or platinum
– these are known as
underlying securities
o r a s s e t s o f t h e E T F.
S o, i f t h e u n d e r l y i n g
assets perform well
i . e . ‘g o e s u p ’, y o u r E T F
also ‘goes up’, however the
opposite is also true.
2BENEFITS OF INVESTING IN ETFs
STT
Diversification
No Securities Hassle-free
ETFs offer you indirect
Transfer Tax Investment
access to a wide variety (STT)
of securities or assets,
giving you the benefit of
being invested in many All ETF transactions are You save time and money
investments rolled into a STT free – saving you without having to do
single investment product. 0.25% when you buy ETFs. extensive research on
many individual companies
or other asset classes,
as ETFs offer you many
preselected investments
rolled into one.
Tax-Free Savings and
Regulation Cash flow Investment Account
distributions (TFSA)
(dividends)
ETFs are well–regulated Reap the benefits of
by the JSE and Financial investing in TFSA friendly
Sector Conduct Authority ETFs using a TFSA:
(FSCA). You can therefore Even though owning an
sleep soundly at night, ETF doesn’t give you
direct ownership of the • No tax on interest
knowing your investment income earned
is protected. underlying securities e.g.
when shares are tracked,
ETF owners are still eligible • No Dividend
to receive dividends Withholding
(good faith payments) and Tax (DWT) on
dividends earned
R interest income if the e.g.
shares pay dividends.
• No Capital Gains
Liquidity Tax (CGT)
Buying or selling an ETF
can be done quickly, easily
and at a low cost on the
JSE through a trading
account or through an
online ETF platform.
3ETF INVESTMENT OPTIONS
1 2
Through a JSE Through an online
stockbroker ETF platform
A JSE authorised stockbroker, is a well- Many ETF providers, JSE stockbrokers and
qualified person who buys and sells financial service providers (FSPs) also offer
securities and offers investment advice to online ETF platforms, some of which offer
investors. debit order and lump sum options.
Opening a brokerage account, will allow To name a few:
you to invest in a variety of JSE listed
instruments, not just ETFs. (Refer to the • Absa Stockbrokers ETF Only Account
list of stockbrokers focused on individual • CoreShares Online
investors on the last page). • Easy Equities
• etfSA
An online share trading account will give • Itransact
you easy access to do it yourself. • SatrixNOW
• Sygnia Alchemy Platform
4HOW MUCH WILL IT COST?
Some of the fees you could face, though not always applicable, are dependent on the
route you take to invest in ETFs:
Monthly fee payable to maintain
A monthly account fee:
your account
Transaction /
Fees charged when buying or selling ETFs
brokerage fee:
Strate settlement fee: Fees charged when buying or selling ETFs
Fees payable to the Financial Sector
Investor Protection Levy:
Conduct Authority (FSCA)
Fees sometimes charged if accessing
Annual platform fee:
ETFs through an online platform
VAT: Value Added Tax
Your selected service provider will help you determine the total investment charges (TICs).
5ETF PROVIDERS
COMPANY PHONE NUMBER WEBSITE
Absa Capital +27 86 134 5223 www.etfcib.absa.co.za
Ashburton Investments +27 11 282 8800 www.asburtoninvestments.com
Cloud Atlas Investing +27 11 268 1852 www.cloudatlasinvesting.com
CoreShares +27 11 321 5571 www.coreshares.co.za
Rand Merchant Bank +27 11 269 9140 www.rmb.co.za
Satrix +27 01 020 2250 www.satrix.co.za
Standard Bank +27 86 012 3000 https://securities.standardbank.co.za/ost/
Stanlib +27 86 012 3003 https://indexinvestments.stanlib.com/
Sygnia +27 86 079 4642 www.sygnia.co.za
FINANCIAL SERVICE PROVIDERS (FSPs)
PHONE
COMPANY WEBSITE
NUMBER
✓ EasyEquities +27 87 940 6108 www.easyequities.co.za
✓ etfSA +27 10 446 0371 www.etfsa.co.za
✓ FNB Share Investing +27 86 074 2737 www.fnb.co.za/share-investing
IG +27 10 344 0053 www.ig.com/za
✓ Itransact +27 86 143 2383 www.itransact.co.za
✓ Unum Capital +27 11 384 2920 www.unum.co.za
Brokers offering online facilities.
✓ Offers Tax Free Investment Account.
Limited list of FSPs, visit www.FSCA.co.za to view all authorised FSPs.
Other Exchange Traded Products (ETPs) include Exchange Traded Notes (ETNs), which are
exchange-traded debt instruments that give investors access to a wide spectrum of assets.
The investor lends money to the issuer of the ETN, usually a bank, and receives a return
based on the movements in a specific benchmark. Benchmarks can be based on interest
rates, commodity prices, a basket of shares, bonds or a currency.
6JSE STOCKBROKERS FOCUSED ON INDIVIDUAL INVESTORS
PHONE
COMPANY WEBSITE
NUMBER
✓ ABSA stock brokers +27 86 005 0403 www.absastockbrokers.co.za
✓ Afrifocus Securities +27 11 290 7800 www.afrifocus.co.za
✓ Anglorand Securities +27 86 028 7422 www.anglorand.co.za
✓ BP Bernstein +27 11 479 3400 www.bpbernstein.co.za
Consilium Securities +27 11 340 1300 www.consiliumsecurities.com
FFO Securities +27 11 471 0520
FNB Securities +27 80 025 6256 www.fnbsecurities.co.za
Independent Securities +27 11 489 5400 www.isec.co.za
Investec Securities www.investecsecuritiesonline.co.za
✓ (Investec Wealth & +27 86 100 3020
Investment)
Lefika Securities +27 11 214 7237 www.lefikasecurities.co.za
Legae Securities +27 11 722 7330 www.legae.co.za
Momentum S.P. Reid www.imaraspreid.co.za
✓ Securities
+27 11 550 6200
Nedgroup Private https://stockbroking.nedsecure.co.za
✓ Wealth Stockbrokers
+27 86 000 3681
Nvest Securities +27 43 735 1270 www.nvestsecurities.co.za
Peregrine Equities +27 11 722 7400 www.peregrine.co.za
Philippus de Witt +27 11 482 4522 www.pdewitt.co.za
✓ Prescient Securities +27 21 700 3600 www.prescient.co.za
✓ PSG Securities +27 86 077 4774 www.psgonline.co.za
✓ SA Stockbrokers +27 11 214 7250 www.sastockbrokers.co.za
Sanlam Private www.sanlamitrade.co.za
Investments (Sanlam +27 11 778 6600
iTrade)
✓ Sasfin Securities +27 11 809 7500 www.sasfinsecurities.co.za
SBG Securities www.securities.standardbank.co.za
✓ (Standard Bank Online +27 86 012 1161
Share Trading)
✓ Sygnia Securities +27 21 446 4940 www.sygnia.co.za
Taquanta Securities +27 21 681 5100 www.taquanta.co.za
✓ Thebe Stockbrocking +27 11 375 1000 www.thebestockbroking.co.za
Brokers offering online facilities. List of stockbrokers correct as of June 2018.
✓ Offers Tax Free Investment Account.
7For information about ETFs and other individual investment solutions, go to:
• Online Learning Modules www.virtualtradinggame.jse.co.za
• Power Hour Sessions www.jse.co.za/events
• JSE Investment Simulator www.virtualtradinggame.jse.co.za
• www.jse.co.za/grow-my-wealth
Contact:
+27 11 520 7000 info@jse.co.za
JSE. Driven for your growth.
Disclaimer: This brochure is intended to provide general information regarding the JSE Limited (“JSE”) and its products and services, and is not intended
to, nor does it, constitute investment or other professional advice. It is prudent to consult professional advisers before making any investment decision
or taking any action which might affect your personal finances or business. All rights in this document vests in the JSE. “JSE” is a trade mark of JSE
Limited. The JSE shall not be liable (including in negligence) for any loss arising out of use of this document. All information is provided for information
purposes only and no responsibility or liability will be accepted by the JSE for any errors or for any loss from use of this document. All rights, including
copyright, in this document shall vest in the JSE. No part of this document may be reproduced or amended without the prior written consent of the JSE.
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